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Contribution & Expenditure Overview
2016-2020 FINANCIAL PLAN
CAPITAL EXPENDITURES
The capital program includes statutory and asset maintenance as well as new projects.
Cash principal payments and budgeted
actuarial earnings over the next five years
(2016 - 2020) will be $63,898,609 and
$5,419,878 respectively.
Section 177 of the Community Charter
allows municipalities to undertake short-
term (up to five years) borrowing to pay
for capital projects. Total short-term debt
outstanding must not exceed $50
multiplied by the municipal population, as
certified by the Minister of Community,
Sport and Cultural Development. The
City’s short-term capital borrowing
capacity for 2016 is $25.6 million.
Section 177 of the Community Charter
also allows municipalities to borrow
money to pay for their current
expenditures. Temporary borrowing
must not exceed total unpaid taxes levied
during the current year. Surrey’s
temporary borrowing capacity for 2016 is
approximately $645 million. The City’s
authorized temporary borrowing limit for
2016 is $20 million.
The City uses several approaches to
finance capital works: “pay as you go”,
internal loans, and external debt.
Surrey continues to use a “pay as you go”
approach to finance a majority of its
capital works projects. The “pay as you
go” approach employed by Surrey has
two significant benefits, namely it:
Preserves flexibility for the City by
allowing it to avoid fixed debt costs
and interest charges; and
Is particularly appropriate in a growing
municipality where development can
be funded through developer
contributions and an increased tax
base.
The City has undertaken a significant
capital program to meet the needs of our
growing community. In order to fund the
capital projects under this program, the
City has borrowed both internally and
externally.
Statutory and Asset Maintenance
Statutory and asset maintenance
constitute the largest part of the capital
program. They are the ‘base’
expenditures required to preserve
previous investments, replace old or worn
-out assets, and service growth.
These expenditures are funded by
ongoing capital sources such as:
Contributions from operating revenue;
DCCs; and
Sundry sources.
These funding sources, although not
guaranteed, are stable and can be relied
upon as long as the City grows.
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